Through June 30, 2020 Six-Month Financial Results - PowerPoint Presentation

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Through June 30, 2020

Six-Month Financial Results

July 30, 2020

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Disclaimer

This presentation has been provided in connection with preparation of the Port Authority’s condensed unaudited financial statements for the six-month period ended June 30, 2020 (“Unaudited Statements”).  The Unaudited Statements were prepared in accordance with U.S. generally accepted accounting principles and should be read in conjunction with the Port Authority’s audited financial statements for the year ended December 31, 2019, available on the Port Authority’s website at panynj.gov.

Some information provided in this presentation is forward-looking and requires the Port Authority to make current assessments of its future financial performance and position based on numerous assumptions, expectations and data which is currently available to us. There can be no assurance that the forward-looking statements will prove to be accurate in the future, especially when considered over the long run, as actual results and future events could differ materially from those anticipated when the statements were made.

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Key Highlights

Due to the prolonged nature and extent of the impact across all lines of business, operating financial results are the worst on record in recent history.

Dramatically reduced activity levels have impacted both the Port Authority and its tenants and vendors and have resulted in two financial impacts in particular:

Gross Operating Revenues have fallen by 24% against 2020 budget ($681M);

Aviation-related Passenger Facility Charges

collected declined $96M.

Combined, this results in app. $777M in lower revenues through June 30,2020, with additional losses against 2020 Budget expected through the balance of the year.

Since the full force of the COVID-19 crisis started in March, the Agency’s revenue loss has averaged $240M per month.

Based on these results, together with the forward-looking forecasts, the Port Authority continues to project the loss in revenues for the 24-month period ending March 2022 to total app. $3B.

Staff have identified app. $200M in operating savings from the 2020 Budget, primarily as a result of lower activity. We

continue to examine operating costs including potential incremental costs necessary to address COVID-19 operating protocols as activity increases.

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YTD January to June NOI

Net Operating Income (NOI) through June of $548M is significantly lower than Budget and prior year actuals as a result of the impacts of COVID-19 on Agency operations.

6-Month Period Ending June 30*

($ in millions)

2020

Actual

2019

Actual

Variance

20A v 19A

2020

Budget

Variance

20A v 20B

Gross Operating Revenues

$

2,160

$2,685

(525)

$2,841

(681)

Operating Expenses

(1,612)

(1,626)

(14)

(1,692)

(80)

Net Operating Income

$ 548

$ 1,059

$ (511)

$1,149

$ (601)

Depreciation & Amortization

(739)

(694)

(45)

-

-

Sandy Insurance Proceeds

-

172

(172)

-

-

Income from Operations

$ (191)

$ 537

$ (728)

-

-

CARES Act Proceeds

199

-

199

-

-

All Other Non-Operating, Net

(209)

(82)

(127)

-

-

Change in Net Position

$ (201)

$ 455

$ (656)

-

-

*

Pursuant to GAAP accounting standards

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Second Quarter (Q2) NOI

Second quarter results are driving the YTD underrun, entirely due to the impacts of COVID-19 on agency operations beginning in March and accelerating in the following months.

Q2 (Three months ending June 30)

($ in millions)

2020

Actual

2019

Actual

Variance

20A v 19A

2020

Budget

Variance

20A v 20B

Gross Operating Revenues

$ 840

$1,393

$ (553)

$1,469

(629)

Operating Expenses

(788)

(823)

(35)

(840)

(52)

Net Operating Income

$ 52

$ 570

$ (518)

$629

$ (577)

Depreciation & Amortization

(375)

(353)

(22)

-

-

Sandy Insurance Proceeds

-

172

(172)

-

-

Income from Operations

$ (323)

$ 389

$ (712)

-

-

CARES Act Proceeds

199

-

199

-

-

All Other Non-Operating, Net

(193)

(38)

(155)

-

-

Change in Net Position

$ (317)

$ 351

$ (668)

-

-

*

Pursuant to GAAP accounting standards

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Q2 Gross Operating Revenues

$(525)M YOY decrease through June, driven by a $(553)M YOY Q2 decrease

attributable to COVID-19 related reductions

.

Primary Variances

A v A / A v B

($186)M / ($230)M

TOLLS & FARES

*Special Project Bonds are included in the total

$ in millions

$840M*

$1,393M*

Q2 2020 A Q2 2019 A Q2 2020 B

Three Months Ending June 30

$1,469M*

($129)M / ($163)M

RENTALS

($159)M / ($160)M

AVIATION FEES

($66)M / ($63)M

PARKING & OTHER

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YTD June Activity: Aviation & PATH

in thousands

Aviation Passenger 2020 Activity

Aviation and PATH have seen the steepest decline in activity volumes as a result of COVID-19, and appear to be on a gradual road to recovery.

Q1 & Q2 YOY Activity Variance

PATH Ridership 2020 Activity

-60% YTD

-56% YTD

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YTD June Activity: TBT & Port

in thousands

TB&T and Port activity volumes have been more resilient throughout the pandemic, with TB&T leading the recovery.

TB&T Vehicle 2020 Activity

Port Container Throughput 2020 Activity

-26% YTD

-8% YTD

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$(14)M YOY decrease through June, driven by a $(35)M decrease in Q2 as a result of COVID-19 expense reductions.

*Interest on Special Project Bonds is included in the total

$ in millions

Q2 Operating Expenses

$788M*

$823M*

Q2 2020 A Q2 2019 A Q2 2020 B

$840M*

Three Months Ending June 30

Primary Variances

A v A / A v B

($33)M / ($56)M

CONTRACT SERVICES

($3)M / ($10)M

MATERIALS & EQUIPMENT

($7)M / ($13)M

UTILITIES

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Cash Flow & Liquidity at June 30, 2020

Cash &

Investments: $3.1B

$464M cash flow from

Operations, a YOY decrease of $490M due to the impacts of COVID-19 on activity and rent

Capital Funds &

CP Available: $375M

Capital Funds total app. $281M, with an additional app. $94M of Commercial Paper (CP) availability

Days Cash on Hand:

47 Days*

*Excludes the General Reserve Fund, Capital Fund, and PFCs

We continue to monitor and manage our cash flow and liquidity; in July we successfully accessed the financial markets to boost our liquidity and capital funds.

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Bonds & Other Obligations

at June 30, 2020

Totals $24.0B, which is an increase of

$52M

compared to year-end 2019*

* Excludes Special Project Bonds, Tower 4 Liberty Bonds, and unamortized premium/(discount); financing obligations shown at par value

Increase due to an increase of Commercial Paper issuances to support the capital program

Partially offset by the scheduled retirement of consolidated bonds and notes